Keeping within your budget seems simple enough, but due to the many types of expense your business and personal life can incur, it can be difficult. One approach to take is to create a minimalist budget that will help to focus on the most important expenses you need. Here’s a quick guide on creating this and implementing it for both your personal and business finances.
Focus on the important things
The key to becoming minimalist with your spending is to cut down on non-essential and non-priority purchases. We all can be guilty of overspending, whether it’s a personal or business expense. If you are a business owner, you may want to have a great office space or the latest technology, but is this essential for being productive and efficient? Being minimalist can help avoid borrowing when you don’t need to, reducing spending to free up more to save and invest. Many people will choose short term loans to cover emergency personal expenses when they do not have enough savings. For businesses, you may seek funding to do help keep things going. However, by focusing on only what’s important and restricting spending to essential needs, your budget will go further and will avoid unnecessary debt.
Review and reduce expenses
Regularly reviewing expenditure is the easiest way to discover where too much money is being spent. Your business may be spending too much on a supplier, for example, or company luxuries that are not sustainable. Auditing finances and looking for opportunities to cut costs and free up more funds can help your business stay under budget. In your personal expenses, doing the same can allow you to save more and not become overly reliant on credit for the things you want. Make a list of the priorities within your finances. Just like goal-setting, it will help focus on the important aspects to help with business growth and development. Then after all the essentials are covered, you can use whatever’s left to reward your teams and give back to those working hard. Whilst the rewards are nice to have, if it is causing your company to go over budget, it’s best to reign this in.
Use automation to make this easy
Automation is key to having structured finances and improving productivity. The more that can be done to improve processes that doesn’t cost a fortune to implement, the better it will be for staff and the business. Having to trawl through expenditure manually is time-consuming, so you can use automation tools to make this simple and keep track. If you still manually pay for certain regular expenses, you should set up automation here too. This way you won’t forget to pay for things that are important as they will automatically leave your expense account instead. Automation is important not just for businesses but also for personal expenses. The more effort you can remove from managing your budget, the more time you will have to review and make changes.
Whilst many may see a minimalist approach as not spending any money and saving as much as possible, this is an extreme. Instead, a minimalist budget is all about questioning expenses and being more frugal to allow you to focus spending on important things, not just building savings.